• The New York Times, Wednesday, July 25, 2007 11 AM

Apple shares fell 6 percent Tuesday after partner AT&T reported fewer iPhone activations than some Wall Street analysts anticipated. In the wake of the media frenzy surrounding the high-priced smart phone, some analysts predicted between 500,000 and 700,000 activations in the day and a half between the quarter's end and the iPhone's introduction. Instead, Apple and AT&T delivered 146,000.

That report sent Apple shares down $8.81 to $134.89, while shares of iPhone carrier AT&T fell 35 cents to close at $39.68. That's right folks, Apple's second-quarter fortunes have already taken on a day and a half worth of iPhone activation data. "Activation" refers to the number of phones that went live on AT&T's Edge network in that time period, it doesn't refer to sales--so gifts and other phones not activated for whatever reason were not counted. The iPhone was released June 29, while the second quarter ended June 30.

AT&T executives, which delivered the numbers during its second-quarter earnings, were unconcerned: "We were absolutely elated with the launch. It couldn't have gone better," Richard G. Lindner, the company's CFO said in an interview. He admitted that supply was unable to meet demand in the first month of the iPhone's release, saying that the company was only able to fix those problems within the last week. Lindner said AT&T expects the iPhone to contribute "substantially" to the telecom giant's future growth.

Read the whole story at The New York Times »